Case Summary and Outcome

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Facts

On April 24, 2024, then-US President Joe Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act (the Act) into law. The Act identifies the People’s Republic of China (PRC) and three other countries as foreign adversaries of the United States and prohibits the distribution or maintenance of “foreign adversary-controlled applications.” An application refers to a downloadable software package that performs a specific function; they are commonly referred to as “apps”. The Act prohibits TikTok – the video-sharing social media platform – by name. Its prohibitions relating to TikTok would take effect on January 19, 2025.

Although TikTok was operated in the U.S. by TikTok Inc., an American company, its ultimate parent company was ByteDance Ltd., a company with operations in China which owned TikTok’s proprietary algorithm, developed and maintained in China, and also developed portions of the source code. ByteDance Ltd. was “subject to Chinese laws that require it to ‘assist or cooperate’ with the Chinese Government’s ‘intelligence work’ and to ensure that the Chinese Government has ‘the power to access and control private data’ the company holds.” [p. 3]

The Act makes it “unlawful for any entity to provide certain services to “distribute, maintain, or update” a “foreign adversary-controlled application” in the United States,” with “civil enforcement actions and heavy monetary penalties” [p. 4-5] An app may be designated a “foreign adversary-controlled application” either if it is “operated, directly or indirectly,” by “ByteDance Ltd.” or “TikTok,” or any subsidiary or successor, or, under a general designation framework, if it is “both (1) operated by a “covered company” that is “controlled by a foreign adversary,” and (2) “determined by the President to present a significant threat to the national security of the United States,” following a public notice and reporting process.”[p.5]. “Covered company” includes “a company that operates an application that enables users to generate, share, and view content and has more than 1,000,000 monthly active users.” [p. 5]

Prohibitions would take effect 270 days after an app had been designated a foreign adversary-controlled application and as the Act specifically designates apps operated by ByteDance and TikTok those prohibitions would be due to take effect 270 days after the Act’s enactment, on January 19, 2025.

The Act does create an exemption for a foreign adversary-controlled application from the prohibitions through a “qualified divestiture” system – determined by the President as one that would result in the app “no longer being controlled by a foreign adversary” and which “precludes the establishment or maintenance of any operational relationship between the United States operations of the [application] and any formerly affiliated entities that are controlled by a foreign adversary”. [p. 5-6] It also allows the President to grant a one-time extension of no more than 90 days with respect to the prohibitions’ 270-day effective date.

The Act was the culmination of years of steps taken by the U.S. government to “address national security concerns regarding the relationship between TikTok and China.” [p. 3] In August 2020, then-President Donald Trump exercised his powers under the International Emergency Economic Powers Act and the National Emergency Act, and issued an Executive Order stating that the spread of Chinese-owned mobile applications “continues to threaten the national security, foreign policy, and economy of the United States.” [p. 3] President Trump specifically referred to TikTok and its collection of “vast swaths of information from its users”. [p. 3] The Executive Order prohibited “certain ‘transactions’ involving ByteDance Ltd or its, subsidiaries” and the prohibited transactions would be identified by the Secretary of Commerce. [p. 3] Two cases in federal courts – TikTok v. Trump 507 F. Supp. 3d 92 (DC 2020) and Marland v. Trump 498 F. Supp 3d 624 (ED PA. 2020) – were filed and the courts both enjoined the prohibitions before they took effect.

However, President Trump also ordered ByteDance to divest all interests and rights in any property “used to enable or support BryteDance’s operation of the TikTok application in the United States.” [p. 4] ByteDance challenged the constitutionality of this order before the District of Columbia (D.C.) Circuit Court which, in February 2021, placed the case in abeyance to “permit the [newly elected president Joe] Biden administration to review the matter” and to negotiate the possibility of alleviating national security concerns with ByteDance without the need for divestiture. [p. 4] The negotiations were unsuccessful, and no agreement was reached.

On May 7, 2024, ByteDance Ltd and TikTok Inc. filed a petition before the US Court of Appeals for the D.C. Circuit for a review of the Act’s constitutionality. On June 20, 2024, the Court consolidated that petition with others filed by two sets of TikTok users and the consolidated petitions were argued on September 16, 2024

On December 6, 2024, the Court denied the petitions.

The petitioners appealed to the Supreme Court, arguing that their rights under the U.S. Constitution’s First Amendment had been infringed. The First Amendment states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

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Decision Overview

The Supreme Court of the United States delivered a unanimous decision. Justices Sontomayor and Gorsuch delivered separate concurring judgments. The central issue for the Court’s determination was whether, by prohibiting TikTok’s operations if it did not follow a qualified divesture, the Act violated the First Amendment.

The Government argued that the Act was a content-neutral restriction (and so subject to an intermediate standard of review). It submitted that it had an interest in regulating data collection and in “preventing a foreign adversary from having control over the recommendation algorithm that runs a widely used U. S. communications platform, and from being able to wield that control to alter the content on the platform in an undetectable manner.” [p. 17-18]

TikTok argued that it was practically impossible to divest within the Act’s specified timeframe of 270 days and so the effect of the Act was to ban TikTok in the US. It submitted that the ban would “burden various First Amendment activities, including “content moderation, content generation, access to a distinct medium for expression, association with another speaker or preferred editor and receipt of information and ideas”. [p. 7-8] TikTok submitted that the Act’s restriction was content-based (and so deserving of a higher standard of review, or “strict scrutiny”) because the definition of “covered company” excluded companies owning apps “whose primary purpose is to allow users to post product reviews, business reviews or travel information and reviews”. [p. 11] It submitted that it was “unlikely” that China would compel TikTok to surrender its data to the Chinese government, and argued that the Act was “underinclusive” as it did not seek to regulate other apps that are “as capable as TikTok of collecting Americans’ data.” [p. 15] TikTok maintained that the government interest in preventing TikTok’s control of the algorithm was a content-based justification which “taint[s]” the Government’s data collection interest and triggers strict scrutiny.” [p. 18]

The Court examined whether the Act’s provisions that TikTok challenged were “subject to First Amendment scrutiny,” and hence required an assessment of the whether the government’s restriction served a compelling state interest, was narrowly tailored and proportional. [p. 7] First the Court had to determine whether the speech at issue was subject to First Amendment protections. With reference to its cases of R. A. V. v. St. Paul and Arcara v. Cloud Books, Inc., the Court assessed whether the Act “directly regulated expressive conduct” and noted that “[l]aws that directly regulate expressive conduct can, but do not necessarily, trigger such review”. [p. 7] In determining whether the Act did directly regulate any expressive conduct it found that it does not regulate the content producers on TikTok and only regulated TikTok and ByteDance “through the divestiture requirement”, and so regulated corporate control. [p. 7] The Court said it would “hesitate to break … new ground” and treat a “regulation of corporate control as a direct regulation of expressive activity or semi-expressive conduct”. [p. 7] It described the petitioners’ case as “more closely approximat[ing] a claim that the Act’s prohibitions, TikTok-specific designation, and divesture requirement ‘impose a disproportionate burden upon’ their First Amendment activities.” [p. 7] With reference to its own jurisprudence, the Court accepted that it had recognized the First Amendment activities TikTok argued were impacted and acknowledged that “an effective ban on a social media platform with 170 million U.S. users certainly burdens those users’ expressive activity in a non-trivial way.” [p. 8] However, it also acknowledged that the nature of the Act differs from the ways in which First Amendment scrutiny has been applied to non-expressive activity in the past. [p. 8] It held that the differences – described as the Act’s “focus on a foreign government, the congressionally determined adversary relationship between that foreign government and the United States, and the causal steps between the regulations and the alleged burden on protected speech” – needed to be considered in determining whether First Amendment scrutiny does apply in this case. [p. 8-9] Nevertheless, and despite it noting that there was no clear framework to determine whether “a regulation of non-expressive activity that disproportionately burdens those engaged in expressive activity” would trigger a heightened First Amendment review”, the Court accepted that the challenged provisions in the Act were subject to First Amendment scrutiny. [p. 9]

The Court discussed the nature of the First Amendment right, referencing Turner Broadcasting System Inc v. FCC, in underlining that “Government action that suppresses speech because of its message” violates the right. [p. 10] It explained the distinction between content-based restrictions – laws that target specific speech based on its content and which are “presumptively unconstitutional” – and content-neutral laws – which pose a less serious risk to the right and so are subject to an “intermediate level of scrutiny” and will be upheld when they “[advance] important governmental interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary”. [p. 10]

After acknowledging that some laws which appear content-neutral on their face can be treated as content-based, the Court held that the Act constituted a “facially content neutral restriction” because it did not “appl[y] to particular speech because of the topic discussed or the idea or message expressed”. [p. 10] The Court rejected TikTok’s argument that the exclusion of apps whose users posted reviews meant that the Act was a content-based restriction, holding that the exclusion did not relate to the TikTok-specific aspects of the Act and so was not relevant.

The Court held that the Act’s TikTok-specific provisions “do not trigger strict scrutiny”. [p. 11] With reference to its jurisprudence on laws that favor certain speakers over others, the Court quoted Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue in highlighting that strict scrutiny is not required when there is justification for a speaker being treated differently because of “some special characteristic” of that speaker. [p. 12] The Court held that, in the present case, TikTok had the special characteristic of “a foreign adversary’s ability to leverage its control over the platform to collect vast amounts of personal data from 170 million users” and so the purpose of the Act’s divesture requirement to prevent that foreign adversary “from accessing the sensitive data of 170 million U.S. TikTok users is not “a subtle means of exercising a content preference.” [p. 12] The Court did stress that it was the scale of TikTok’s data collection that justified the differential treatment of it as a speaker.

Accordingly, the Court held that the Act satisfied intermediate scrutiny and that the purpose of its provision was to ensure that China – “a designated foreign adversary” – did not “leverage control over ByteDance” so as to obtain Americans’ personal data, which was an “important Government interest”. [p. 13] The Court mentioned the type of data TikTok collects – “age, phone number, precise location, internet address, device used, phone contacts, social network connections, the content of private messages sent through the application, and videos watched”, as well as “user data, user content, behavioral data (including “keystroke patterns and rhythms”), and device and network data (including device contacts and calendars”. [p. 12-13] The Court noted the concern that the collection of this data could lead to the tracking of U.S. Federal officials by China and that Chinese law requires Chinese companies to disclose this data to the Chinese government “’making companies headquartered there an espionage tool’ of China.” [p. 13] The Court dismissed TikTok’s argument that it was unlikely that the app would be forced to hand over data of U.S. citizens, commenting that the evidence demonstrated that “China ‘has engaged in extensive and years-long efforts to accumulate structured datasets, in particular on U.S. persons, to support its intelligence and counterintelligence operations.” [p. 14] It held that TikTok had not demonstrated that the Government’s “reasonable inference” that China might demand this information from TikTok was not justified. [p. 15] The Court acknowledged evolving threats and so stated that it would “afford the Government’s ‘informed judgment’ substantial respect here”. [p. 15] It also accepted that the Government “had good reason to single out TikTok for special treatment”. [p. 15]

In determining whether the Act – as a restriction to First Amendment rights – met intermediate scrutiny, the Court again quoted from the Turner case and noted that “a regulation need not be the least speech-restrictive means of advancing the Government’s interests.” [p. 16] It explained that the standard would be satisfied if the Act did further a legitimate government interest “that would be achieved less effectively absent the regulation” but which does not “burden substantially more speech than is necessary.” [p. 16] The Court found that the Act did meet this standard as the government’s interest in preventing the collection of data by a foreign adversary would be hampered if there was not a “qualified divesture” of TikTok in the US. It noted that, because of the opportunity given to TikTok to divest, the Act did not impose an outright ban and so was not “substantially broader than necessary” for the government to be able to achieve its goals. The Court summarized the Act’s effect as being “[t]he prohibitions prevent China from gathering data from U.S. TikTok users unless and until a qualified divestiture severs China’s control.” [p. 16] In rejecting TikTok’s suggestions of other alternatives, the Court stressed that it must give “latitude” to the government “to design regulatory solutions to address content-neutral interests,” and that the Act’s constitutionality is not dependent on whether the Court agrees with the government’s choice. [p. 17]

In assessing the government’s argument that they had an interest in preventing China – as a foreign adversary – from have control over the algorithm that recommended content to TikTok users, the Court examined TikTok’s claim that this triggered strict scrutiny because it was a content-based justification for restricting their First Amendment activities. The Court explained that this would mean that the Act was justified on both content-neutral and content-based grounds but that TikTok had not provided any jurisprudence to assist the Court in how to undertake this type of case (as it would require both strict and intermediate scrutiny). However, the Court found that it was not necessary to determine this question as the Act would have passed the challenge raised on the data collection issue; the evidence demonstrated that Congress was sufficiently concerned about the national security concerns of China’s data collection on TikTok that these concerns were sufficient to sustain the Act’s constitutionality.

Accordingly, the Court acknowledged that TikTok “offers a distinctive and expansive outlet” for the 170 million US users, but that Congress had determined that TikTok’s continued operation was a national security concern. It held that the Act’s provisions did not violate TikTok’s First Amendment rights.

Justice Sotomayor, concurred in part and concurred in the judgment. She emphasized that the Act “impose[s] a disproportionate burden” on TikTok users engaged in expressive activity on the app, and that these types of laws “are subject to heightened scrutiny under the First Amendment”. [p. 1 of Justice Sotomayor’s opinion] She added that the Act “effectively prohibits TikTok from collaborating with certain entities regarding its “content recommendation algorithm” even following a qualified divestiture and implicates “creators’ ‘right to associate’ with their preferred publisher ‘for the purpose of speaking’,” which also requires First Amendment scrutiny. [p. 1-2]

Justice Gorsuch delivered a separate concurring opinion and noted, given the tight timeframes in which the case – affecting 170 million American TikTok users – was decided, he had “only a few, and admittedly tentative, observations”. [p. 1 of Justice Gorsuch’s opinion] He agreed with the Court in not “endorsing the government’s asserted interest in preventing ‘the covert manipulation of content’, as ‘[o]ne man’s ‘covert content manipulation’ is another’s ‘editorial discretion’,” noting that journalists decide what stories to tell routinely through “less-than-transparent judgments”. [p. 1] Justice Gorsuch stressed the importance of freedom of speech and thought, and commented that the Government has recently sought to censor online speech “as if the internet were somehow exempt from the full sweep of the First Amendment”. [p. 2] Justice Gorsuch stated that he was “pleased” that the Court refused to consider confidential information that the Government sought to share with it but not with TikTok. [p. 2] He also expressed “serious reservations” about whether the Act was, in fact, content-neutral – which means that the Court did not apply strict scrutiny. [p. 2] He said that the “tiers of scrutiny” can be helpful to the Court’s analysis, but that he “worr[ied] that litigation over them can sometimes take on a life of its own and do more to obscure than to clarify the ultimate constitutional questions”. [p. 3]

Justice Gorsuch stressed that the Act served a “compelling interest”, and set out the dangers he saw of TikTok mining the data and then having to disclose it to China – a foreign adversary. He said that the “remedy Congress and the President chose here is dramatic” but that the Act was “appropriately tailored”. [p. 4] He set out the alternatives, noting that the “usual and preferred remedy” of “more speech” would not be appropriate in the case of data collection, and that imposing criminal penalties for the sharing of data with China would likely be ineffectual. [p. 4] He added that any form of compliance regime to ensure the data was not being shared with China would create secondary constitutional concerns as the U.S. Government would then have to monitor data to ensure it “isn’t illicitly flowing overseas”. [p. 4] He questioned whether the law would be successful in achieving its aim, but noted that the Court was only concerned with whether it was constitutional and not whether it was wise.

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